A fitness club gives clients a free month after they have paid for eleven months. Approximately half of their clients remain with the club long enough to take advantage of this offer. Required: 1....

A fitness club gives clients a free month after they have paid for eleven months.
Approximately half of their clients remain with the club long enough to take
advantage of this offer.
Required:
1. Define the term “Liability”. Then explain whether the free month offer results in
a liability for the fitness club.
2. Explain what makes a liability “current”. Then explain whether the free month
offer results in a current liability for the fitness club.
3. Define the term “contingent liability”. Then explain whether the free month
offer results in a contingent liability for the fitness club.